Rachel Stevens

[2016] FWCA 3515

[2016] FWCA 3515

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Rachel Stevens
(AG2016/2932)

NAMBOURNE HOLDINGS PTY LTD ENTERPRISE AGREEMENT 2009

Food, beverages and tobacco manufacturing industry
COMMISSIONER RYAN	MELBOURNE, 1 JUNE 2016

Application for termination of the Nambourne Holdings Pty Ltd Enterprise Agreement 2009.

[1] Application has been made by Ms Rachel Stevens, (the Applicant) for termination of the Nambourne Holdings Pty Ltd Enterprise Agreement 2009 (the Agreement) made on 15 June 2010 under the Fair Work Act 2009 (the Act). The Applicant is a 17 year old student employed by the Respondent as a retail employee at one of the Respondent’s Bakers Delight outlets. The Commission notes that whilst the Applicant is a full time student and a part time retail employee for the Respondent, she has presented a thoroughly researched and comprehensive application and material in support of her application.

[2] The Agreement was made between Nambourne Holdings Pty Ltd T/A Bakers Delight Chadstone (the Employer) and its employees. The Agreement has passed its nominal expiry date of 21 June 2014.

[3] The Applicant set out her reasons for termination of the Agreement in a Statutory Declaration which forms part of this application. Those reasons included:

“This agreement does not meet the 'Fairness Test'.- The loaded rate does not adequately compensate the employee for lack of penalty rates, sick leave/carer's leave, uniform laundry allowance and annual leave.”

[4] The Employer advised the Commission on 5 May 2015 that it does not object to the termination of the Agreement. In that response Ms Jackson of the Employer provided a detailed response to the application in which she stated that “Each year we update our rates of pay as I subscribe to a service which factors in the new minimum wage rates and any other changes that need to be considered.”

[5] That email was shared with the Applicant. Subsequently the Applicant provided a lengthy written response to Ms Jackson’s email.

[6] Because I then had all of this additional material before me, I conducted a hearing in this matter on 25 May 2016.

[7] At the hearing Ms Stevens represented herself and Ms Rebecca Jackson represented the Employer.

[8] Section 226 of the Act provides that if an application for the termination of an enterprise agreement is made under s.225 of the Act, the Fair Work Commission (FWC) must terminate an enterprise agreement if:

“226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”

[9] In the present matter the Commission is satisfied that it is positively in the public interest to terminate the Agreement.

[10] The Agreement was approved by the Commission on 15 June 2010 and had a nominal expiry date of 21 June 2014. The approval of the Agreement was subject to 4 undertakings given by the Respondent in answer to concerns raised by the Commission.

[11] The Agreement contains a three level classification structure for retail employees: Level 1 Competent, Level 2 Assistant Manager and Level 3 Store Manager and a schedule of minimum rates of pay which operated from the commencement of the Agreement. The Agreement did not contain any wage increases although the Agreement provided for the following:

9.1 The minimum rates of pay for each hour worked are set out in Schedule A of this Agreement, and are subject to adjustment by Fair Work Australia as made from time to time.

[12] The practical operation of this clause is that the wage rates would not and could not be adjusted during the life of the Agreement as the Commission does not have the power to adjust the wage rates in enterprise agreements either by increasing the wage rates or by reducing the wage rates. The Respondent has increased the wage rates by applying the Commission’s annual wage review outcomes to the wage rates in Schedule A to the Agreement.

[13] The classification structure of the Agreement clearly permits the Respondent to employ retail employees at Level 1 under the Agreement who would be Level 3 under the General Retail Industry Award 2010. This is so because the Level 1 classification under the Agreement is expressed so generally that an employee required to have responsibility of closing the business at night and securing the premises is only considered to be a Level 1 employee. However the same employee under the General Retail Industry Award 2010 would be required to be as a Level 3 employee. It appears that the unloaded rate in the Agreement (even with the increases paid by the Respondent) would not match the Level 3 rate under the Award given that the unloaded rate in the Agreement includes amounts to cover for penalties, loadings and allowances separately provided for in the General Retail Industry Award 2010 and the Food, Beverage and Tobacco Manufacturing Award 2010.

[14] The Agreement contains a specific loaded rate for retail employees who are designated by the Respondent as Monday to Sunday Retail Employees. A retail employee can be designated as a Monday to Sunday Retail Employee without being required to work every day Monday to Sunday. It would appear that a retail employee who is rostered to work on Saturdays or Sundays is a Monday to Sunday Retail Employee. The loaded rate for Monday to Sunday Retail Employees is grossly insufficient compared to the rates in the General Retail Industry Award 2010 to properly remunerate the employee in circumstances where a Monday to Sunday Retail Employee works all or the majority of their hours on a weekend.

[15] The Agreement also contains rates of pay which are loaded to include payment for annual leave and personal/carer’s leave entitlements. The Agreement is constructed so that it would appear that the Respondent has the right to direct that a full time or part time employee will receive the loaded rate of pay. Given that the device of using an enterprise agreement to buy out all entitlements to annual leave and personal/carers leave is clearly impermissible 1 termination of the Agreement to remove this odious provision is most clearly in the public interest.

[16] The Applicant raised the issue of meal and rest breaks. The provisions of clause 24 of the Agreement are broadly in line with clause 31 of the General Retail Industry Award 2010. However, the operation of clause 24 of the Agreement is less beneficial to employees than the entitlements under clause 31 of the General Retail Industry Award 2010.

[17] The Agreement appears to apply to all employees of the Respondent who are employed in a classification contained in the Agreement. The Agreement however only refers to employees who are full time and part time employees. Casual employees, if any, would be covered by the Agreement but not receive casual loadings as provided for in the General Retail Industry Award 2010 or the Food, Beverage and Tobacco Manufacturing Award 2010. It is possible that the Agreement is intended to only cover employees who are either full time or part time employees and not to cover casual employees. The structure of the Agreement does not appear to prevent the Respondent from employing casual employees in the classifications covered by the Agreement. The possibility that a class of employees is not covered by the Agreement but would be covered by the modern awards supports a finding that it is not contrary to the public interest to terminate this Agreement. At the very least the termination of the Agreement will place all employees on an equal footing.

[18] Whilst the Agreement covers part time employees of the Respondent the Agreement has none of the protections found in clause 12 of the Food, Beverage and Tobacco Manufacturing Award 2010 or the General Retail Industry Award 2010. The rostering provisions of clause 8 of the Agreement mean that part time employees would have no agreed hours and no agreed start and finish times and no agreed days. In all respects part time employment under the Agreement is significantly inferior to part time employment under either modern award.

[19] The Agreement contains four undertakings which form part of the Agreement. One of the undertakings requires the Respondent to undertake reconciliations to reconcile the amount that an employee earnt under the Agreement with the amount that the employee would have earnt under the relevant award and to pay any deficiency to the employee. The reconciliations were to be conducted on request from an employee and were to be conducted for every employee when the employment relationship ended. At the hearing the Commission asked the Respondent if it had complied with the undertakings to conduct a reconciliation when each employee left the employment of the Respondent. The Respondent acknowledged that it had never conducted a reconciliation in relation to any employee whose employment had ceased. Non-compliance with undertakings given at the time that the Agreement was approved is a further ground as to why termination of this Agreement is not contrary to the public interest.

[20] The Commission has taken into account the views of the Applicant, as being representative of the views of the employees covered by the Agreement, and the views of the Respondent as required by s.226(b)(i) and the Commission has taken into account the circumstances of the employees and the Respondent including the likely effect that the termination will have on each of them and the Commission considers that it is appropriate to terminate the Agreement.

[21] Nambourne Holdings Pty Ltd has advised the Commission that it has put in place the necessary changes to its payroll systems to accommodate employees being paid pursuant to the relevant modern awards, the General Retail Industry Award 2010 and the Food, Beverage and Tobacco Manufacturing Award 2010 as from 9 June 2016.

[22] It is in these circumstances that it is appropriate to terminate the Agreement. I am therefore required by section 226 of the Act to terminate the Agreement.

[23] Accordingly, Nambourne Holdings Pty Ltd Enterprise Agreement 2009 is terminated and pursuant to section 227 of the Act, the termination is to take effect on and from 9 June 2016.

[24] The Respondent is directed to provide a copy of this decision to each person engaged under the terms of the Agreement as at 8 June 2016.

COMMISSIONER

 1   See Re Canavan Building Pty Ltd [2014] FWCFB 3202 (unreported, Ross J, Hatcher VP, Acton SDP, Cargill C, Wilson C, 29 May 2014) [55]–[57].

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